Question 1

Adam Smith's book,one of the first systematic treatments of economics,was entitled

Accepted Answer

A)  The Plan of the Ages. 
B)  The General Theory of Money, Taxes, and Income. 
C)  The Wealth of Nations. 
D)  Principles of Economics. 
E)  Concepts in Moral Philosophy. 
A)  The Plan of the Ages. 
B)  The General Theory of Money, Taxes, and Income. 
C)  The Wealth of Nations. 
D)  Principles of Economics. 
E)  Concepts in Moral Philosophy.

Question 2

The first economist to point out the importance of specialization of labor was

Accepted Answer

A)  Leonardo da Vinci. 
B)  Adam Smith. 
C)  David Ricardo. 
D)  John Maynard Keynes. 
E)  Enrico Caruso. 
A)  Leonardo da Vinci. 
B)  Adam Smith. 
C)  David Ricardo. 
D)  John Maynard Keynes. 
E)  Enrico Caruso.

Question 3

The production possibilities curve illustrates the basic principle that

Accepted Answer

A)  an economy's capacity to produce increases in proportion to its population. 
B)  if all resources of an economy are in use, more of one good can be produced only if less of another is produced. 
C)  an economy will automatically seek that output at which all of its resources are employed. 
D)  no opportunity cost exists in production. 
A)  an economy's capacity to produce increases in proportion to its population. 
B)  if all resources of an economy are in use, more of one good can be produced only if less of another is produced. 
C)  an economy will automatically seek that output at which all of its resources are employed. 
D)  no opportunity cost exists in production.

Question 4

The law of comparative advantage explains why

Accepted Answer

A)  individuals choose specialized careers. 
B)  firms specialize in the production of certain goods. 
C)  nations develop strengths in certain industries. 
D)  All of the above are correct. 
A)  individuals choose specialized careers. 
B)  firms specialize in the production of certain goods. 
C)  nations develop strengths in certain industries. 
D)  All of the above are correct.

Question 5

The U.S.government spent over $3.6 trillion in budget year 2010.

Accepted Answer

A) True 
 B)False

Question 6

If a society uses the market system,it must rely solely on markets to solve all of its problems.

Accepted Answer

A) True 
 B)False

Question 7

The major coordination tasks can be summarized with the questions

Accepted Answer

A)  who, what, when, where? 
B)  how, what, for whom? 
C)  how, what, why? 
D)  how, why, for whom? 
E)  who, how, what? 
A)  who, what, when, where? 
B)  how, what, for whom? 
C)  how, what, why? 
D)  how, why, for whom? 
E)  who, how, what?

Question 8

Market system works very well in solving some basic problems of the economy but it fails in some cases.Provide examples.

Accepted Answer

The market deals with efficiency in prod

Question 9

A decrease in the unemployment rate will shift the PPF outward from the origin.

Accepted Answer

A) True 
 B)False

Question 10

Probably the most important source of efficiency in production is

Accepted Answer

A)  investing in more capital goods. 
B)  consuming rationally. 
C)  expanding the production possibilities frontier. 
D)  increasing inputs of energy and raw materials. 
E)  the specialization of labor. 
A)  investing in more capital goods. 
B)  consuming rationally. 
C)  expanding the production possibilities frontier. 
D)  increasing inputs of energy and raw materials. 
E)  the specialization of labor.

Question 11

Which of the following must cope with scarcity?

Accepted Answer

A)  individuals 
B)  companies 
C)  governments 
D)  families 
E)  All of the above are correct. 
A)  individuals 
B)  companies 
C)  governments 
D)  families 
E)  All of the above are correct.

Question 12

The term "satisficing" indicates an optimal choice.

Accepted Answer

A) True 
 B)False

Question 13

The production possibilities frontier for a country is usually drawn

Accepted Answer

A)  as a straight line, sloping downward. 
B)  as a straight line, sloping upward. 
C)  bowed outward from the origin. 
D)  bowed inward toward the origin. 
E)  as a dotted line when sloping downward and as a full line when sloping upward. 
A)  as a straight line, sloping downward. 
B)  as a straight line, sloping upward. 
C)  bowed outward from the origin. 
D)  bowed inward toward the origin. 
E)  as a dotted line when sloping downward and as a full line when sloping upward.

Question 14

Monetary costs and opportunity costs are always identical.

Accepted Answer

A) True 
 B)False

Question 15

In a market system,the major coordination tasks are carried out

Accepted Answer

A)  with the approval of central planners. 
B)  as part of the regular appropriation process of Congress. 
C)  irregularly by the major corporations. 
D)  automatically by the market mechanism. 
A)  with the approval of central planners. 
B)  as part of the regular appropriation process of Congress. 
C)  irregularly by the major corporations. 
D)  automatically by the market mechanism.

Question 16

If production involves constant opportunity cost,the production possibilities curve

Accepted Answer

A)  is "bowed inward." 
B)  is a straight line. 
C)  is "bowed outward." 
D)  is a wavy line. 
E)  has an unpredictable shape. 
A)  is "bowed inward." 
B)  is a straight line. 
C)  is "bowed outward." 
D)  is a wavy line. 
E)  has an unpredictable shape.

Question 17

The division of labor benefits society only if

Accepted Answer

A)  a system of exchange exists. 
B)  society uses all of its resources efficiently. 
C)  society has no specialized resources. 
D)  labor resources are not scarce. 
A)  a system of exchange exists. 
B)  society uses all of its resources efficiently. 
C)  society has no specialized resources. 
D)  labor resources are not scarce.

Question 18

In a market system,____ distributes goods among consumers in accord with their tastes and preferences,using voluntary exchange to determine who gets what.

Accepted Answer

A)  a price system 
B)  a regulatory framework 
C)  a democratic government 
D)  a closed system 
A)  a price system 
B)  a regulatory framework 
C)  a democratic government 
D)  a closed system

Question 19

What would be the opportunity cost of a child using a coupon for a free ice cream cone?

Accepted Answer

A)  the dollar cost of the cone she selected 
B)  the other types of ice cream she could have selected 
C)  zero - because the good was not a durable good 
D)  zero - because the good was free 
A)  the dollar cost of the cone she selected 
B)  the other types of ice cream she could have selected 
C)  zero - because the good was not a durable good 
D)  zero - because the good was free

Question 20

Specialization in production

Accepted Answer

A)  raises productivity. 
B)  requires money. 
C)  stimulates exchange. 
D)  All of the above are correct. 
A)  raises productivity. 
B)  requires money. 
C)  stimulates exchange. 
D)  All of the above are correct.

Adam Smith's book,one of the first systematic treatments of economics,was entitled

The first economist to point out the importance of specialization of labor was

The production possibilities curve illustrates the basic principle that

The law of comparative advantage explains why

The U.S.government spent over $3.6 trillion in budget year 2010.

If a society uses the market system,it must rely solely on markets to solve all of its problems.

The major coordination tasks can be summarized with the questions

Market system works very well in solving some basic problems of the economy but it fails in some cases.Provide examples.

A decrease in the unemployment rate will shift the PPF outward from the origin.

Probably the most important source of efficiency in production is

Which of the following must cope with scarcity?

The term "satisficing" indicates an optimal choice.

The production possibilities frontier for a country is usually drawn

Monetary costs and opportunity costs are always identical.

In a market system,the major coordination tasks are carried out

If production involves constant opportunity cost,the production possibilities curve

The division of labor benefits society only if

In a market system,____ distributes goods among consumers in accord with their tastes and preferences,using voluntary exchange to determine who gets what.

What would be the opportunity cost of a child using a coupon for a free ice cream cone?

Specialization in production

What Is Economics?

The Economy: Myth and Reality

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

Adam Smith's book,one of the first systematic treatments of economics,was entitled

The first economist to point out the importance of specialization of labor was

The production possibilities curve illustrates the basic principle that

The law of comparative advantage explains why

The U.S.government spent over $3.6 trillion in budget year 2010.

If a society uses the market system,it must rely solely on markets to solve all of its problems.

The major coordination tasks can be summarized with the questions

Market system works very well in solving some basic problems of the economy but it fails in some cases.Provide examples.

A decrease in the unemployment rate will shift the PPF outward from the origin.

Probably the most important source of efficiency in production is

Which of the following must cope with scarcity?

The term "satisficing" indicates an optimal choice.

The production possibilities frontier for a country is usually drawn

Monetary costs and opportunity costs are always identical.

In a market system,the major coordination tasks are carried out

If production involves constant opportunity cost,the production possibilities curve

The division of labor benefits society only if

In a market system,____ distributes goods among consumers in accord with their tastes and preferences,using voluntary exchange to determine who gets what.

What would be the opportunity cost of a child using a coupon for a free ice cream cone?

Specialization in production

What Is Economics?

The Economy: Myth and Reality

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters